Counties briefed on new legislation

KENANSVILLE -- "There are too many bills floating around and you'd better stay awake," is how Wayne County Commission Chairman Bud Gray summed up the barrage of legislation now facing counties across North Carolina.

Gray along with Commissioners J.D. Evans, Steve Keen, Jack Best and Sandra McCullen joined commissioners from across the eastern part of the state Wednesday night for a legislative briefing by the staff of the North Carolina Association of County Commissioners.

As of April 8, more than 2,475 bills had been filed compared to a total 4,962 bills filed in the last biennium.

Wednesday's briefing was long on bad news and short on good news.

Commissioners were told they not only have to adjust to declines in revenues, particularly sales taxes, but be diligent in staying abreast of bills introduced by state lawmakers.

For the most part the bills of most concern are ones that look to take care of special interest groups, mount attacks on tax revenues and attempt to put the state in a parental role -- all at the expense of county budgets and autonomy, said NCACC Executive Director David Thompson.

And in some cases the attacks are not obvious, said Rebecca Troutman, NCACC intergovernmental relations director.

"For example, buried in the Senate budget proposal, I found a requirement that counties assume 50 percent of school bus liability damage costs," she said.

Also, there is an indication that the state wants to broaden the tax base while lowering the rates, she said. One example is applying sales tax to services

Piled on top of that is a state budget that by the second year of the state's budget biennium could face a $5 billion shortfall, an anticipated continuing decline in sales tax revenues and a recession that isn't expected to improve to any significant degree for another year.

"Can it get any worse?" she asked. "My concern is that it is not getting any better."

Sales tax receipts for February were the worst on the record for the month and retail sales are expected to be down for most of 2009, she said.

Also, Ms. Troutman said that people are not buying new cars so that tax values are falling on older vehicles.

She encouraged commissioners to let their lawmakers know that their counties are hurting.

While commissioners wanted to know about a bill transferring secondary road construction and maintenance to counties, Thompson said there were other bills they should be more worried about. In many cases the bills, at first glance, may seem to make sense but are still problems for counties.

Thompson agreed that the road costs would be too great for most counties to bear. He noted that the maintenance cost would far outweigh construction.

"I have been told this will die in the Senate," he said.

What counties need to be more concerned about, he said, are bills like House Bill 887 and its Senate companion SB1026 that deal with tort reform.

The bill would waive immunity for local governments in all cases allowing jury trials. It also redefines proprietary functions to widen the number of services a local government could be held liable for.

It would eliminate a local government's choice to waive its immunity by purchasing liability insurance. The bill also prohibits administrative resolution of any claims greater than $25,000 without court review.

Proponents point out that a $1 million award cap per person per occurrence would benefit local governments.

However, Thompson argued the bill would increase cases that go to trial and as such increase personnel and insurance costs for counties.

Other bills including HB750, SB427, SB178 and HB1266 would benefit unions, he said. For example, SB178 would remove the state's prohibition on collective bargaining with labor unions.

Other special interest group bills that would negatively affect counties include ones dealing with the media, Realtors and home builders, he said.

He also warned that a number of bills attack counties' tax revenues.

HB1434 would repeal a law designed to help counties improve collection of motor vehicle taxes. Currently, the taxes are collected in arrears. A law passed in 2004 would require people to pay the vehicle tax at the same time they renew their registration. That law would be repealed by HB1434.

SB915 would repeal the 0.4 percent land transfer tax authority given to counties in 2007.

Thompson said the state Department of Transport-ation says the process is too cumbersome and difficult. Not so, he said. He added the DOT has known about the pending change for several years and has had the time to prepare for it.

"It is not the counties' problem that the state has known about it for two years and is still not prepared," he said.

Thompson said several bills would allow the state to close or merge ABC stores and to contract with private stores to sell alcohol now controlled by the state. The bills, he said, are the first steps towards privatization of liquor sales in the state.

That bill and several others cast the role of the state as "parent" in which "they think they can do it better than local governments," he said.

Thompson said the federal stimulus money coming into the state would help, but he warned commissioners to be "very careful when you apply for that money."